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Presentation by Louis Hernandez, Jr. for The 2011 Finance & Accounting Forum for Financial Institutions
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Louis Hernandez, Jr.June 20, 2011
1
Too Small to Fail: How the Financial Industry Crisis Changed the World’s Perceptions
2
Accelerating Global Change
Source: World Bank
Global Economy Has Improved
Economic Shifts: China and India Grow; U.S. and Japan Decline
U.S. Japan China India
Sh
are
of
Wo
rld
GD
P
Source: International Monetary Fund* Projection
1990 2014*20092000
41.9%
3.3%
45.5%
5.1%
33.7%
17.61%
31.1%
13.7%
4
China India U.S.5
(1.3 billion)
25% with Highest IQ(335 million)
(1.2 billion)
(307 million)28% with Highest IQ(324 million)
Population Shifts: China and India Have More Honors
Kids than the U.S. Has Kids
Tota
l P
op
ula
tio
n
Education Drives Higher Incomes
2002 2007
1.18 1.230.99
4.95
Millions of College Graduates
U.S. China
Source: National Center for Education Statistics, China Economic Review
U.S. (2000 - 2007)
China (2000 - 2007)
9.9%
61.5%
Change in Real GDP per Capita
Source: ERS International Macroeconomic Data Set
6
7
African Amer. Pop. Up 3.2%
Hispanic Pop.Up 2.9%
White Pop. Down -3.9%
Demographic Shifts Changing Ethnic Population
8
3.0% GDP growth in 2011
Retail sales up 6.5%
Unemployment still high at 9.1%
9
Housing starts at historic lows
Home values depressed
Foreclosures up 2%
10
Jan-
00
Jan-
02
Jan-
04
Jan-
06
Jan-
08
Jan-
10
0
20
40
60
80
100
120
140
160
25.3
63.4
Consumer Confidence Remains Low
From Subprime Bubble to Dodd-Frank:An Industry in Transition
11
The fastest distance between 2 points
A guy walking a tight rope
13
Margin Compression
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
3.00%
3.20%
3.40%
3.60%
3.80%
4.00%
4.20%
4.40%
3.18%
3.61%
Credit Union Bank
14
Channel Proliferation
15
52%
Operating Expense (Since 1995)
64%
Compliance (as of 2009)
208%
Loan Loss Provision(Since 1995)
Costs have Increased
16
Source: Raddon Financial Group, March 2011
Regulatory Compliance Burdens Small FIs
17
Industry Consolidation Continues
18
ExpandedMarketplace
19
thereHave
Beenchallenges
Moment of Clarity
21
Big Five Dominance
37% of U.S. Deposits
20% of Branches
60% of Assets
22
Consumers Prefer Community-Based Institutions
Consumerization Financial Services
of
24
Embracing Consumerization Opens New Markets
25
Position To Win
Technology Has Always Played an Important Role
26
Technology
Incr
ease
Rev
enue
Reduce CostsCustomer
Intelligence
Manage Channel Proliferation
Mitigate Regulatory Burden
Increase Non-Interest Income
Diversify Revenue
Technology Impact
28
Now’s the Time forCollaboration
29
Collaboration in Technology
Pacific coast bankers bank
30
Collaboration in Technology
Collaboration in Technology
32
Embrace Your Opportunity
Follow me and download a copy of this presentation on Facebook and LinkedIn:
www.facebook.com/toosmalltofail
www.linkedin.com/in/louishernandezjr
33
34
www.opensolutions.com
34
Order Your Copy Today!
Louis Hernandez, Jr.June 20, 2011
35
Too Small to Fail: How the Financial Industry Crisis Changed the World’s Perceptions